Nickelodeon Launching SVOD Service

Viacom-owned Nickelodeon plans to launch an over-the-top subscription video service in March — targeting mobile consumers. Nickelodeon will provide more details and announce the brand name at its upfront presentation in February.

“We believe this innovative service, which will have a distinct brand and will target the fast growing mobile market, will be very attractive for parents and children,” Viacom CEO Philippe Dauman said in the media company’s fourth-quarter fiscal call.

Indeed, households with kids are one of the key demographic groups shaping both connected hardware ownership and digital content consumption. Those with children under 8 are significantly more likely to be digital video consumers than those without children, according to Futuresource Consulting. The London-based firm suggests that households with children under 12 are twice as likely to subscribe to Netflix than the households without children. This demo is also twice as likely to have cancelled (cut the cord) their pay-TV subscription in the last 12 months – likely due to using online subscription video-on-demand services.

Nickelodeon’s OTT service would join a bandwagon of media companies seeking to mine incremental revenue from online video distribution, including Dish’s pending $20 platform featuring ESPN; ad-supported CBS All Access, and services from HBO and Showtime, among others.

Key to the success of the venture and any other third-party OTT service is that it doesn’t cannibalize existing content distribution channels, according to Michael Nathanson with MoffettNathanson in New York.

“Along with the company’s focus to grow non-Nielsen-measured ad revenue, we see this OTT service as another way Viacom is looking to reposition for an increasingly digital world,” Nathanson wrote in a Jan. 30 note.